CIRCULARS

REGULATIONS ON FOREIGN LOAN CONDITIONS OF ENTERPRISES NOT GUARANTEE BY THE GOVERNMENT

Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 6;

Pursuant to the Law on Credit Institutions No. 47/2010/QH12 dated June 16, 6;

Pursuant to the Ordinance on Foreign Exchange No. 28/2005/PL-UBTVQH11 of the National Assembly Standing Committee dated December 13, 12;

Pursuant to Ordinance No. 06/2013/UBTVQH13 dated March 18, 3 amending and supplementing a number of articles of the Ordinance on Foreign Exchange dated March 2013, 18;

Pursuant to Decree No. 156/2013/ND-CP dated November 11, 11 of the Government defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

Pursuant to Decree No. 219/2013/ND-CP dated December 25, 12 on management of foreign loans and repayment of enterprises not guaranteed by the Government;

At the proposal of the Director of the Foreign Exchange Management Department,

The Governor of the State Bank of Vietnam promulgates a Circular on conditions for foreign loans of enterprises not guaranteed by the Government.

Chapter I

GENERAL RULES

Article 1. Scope of adjustment and subject of application

1. This Circular stipulates the conditions for foreign loans of residents being enterprises, cooperatives, unions of cooperatives, credit institutions (except commercial banks being state enterprises), branches Foreign banks established and conducting business in Vietnam are not guaranteed by the Government (hereinafter referred to as the Borrower), except for the cases specified in Clauses 2 and 3 of this Article.

2. The conditions for international bond issuance of enterprises that are not guaranteed by the Government shall comply with the Government's regulations on corporate bond issuance.

3. Conditions for foreign loans of commercial banks that are state-owned enterprises shall comply with separate regulations of the State Bank of Vietnam (hereinafter referred to as the State Bank).

Article 2. Explain words

In this Circular, the following terms are construed as follows:

1. Self-borrowing and self-paying foreign short-term loans (hereinafter referred to as short-term foreign loans) are foreign loans not guaranteed by the Government for a term of up to one (01) year.

2. Self-borrowing and self-repaying foreign medium- and long-term loans (hereinafter referred to as medium- and long-term foreign loans) are foreign loans not guaranteed by the Government with a term of more than one (01) year.

3. Production and business plan using foreign loans is a production and business plan which proves the legitimate and reasonable purpose and demand for foreign loans and the borrower's debt repayment ability.

4. Investment project is a collection of proposals to invest medium and long-term capital to carry out investment activities in a specific area, within a defined period of time.

5. Foreign borrowing costs are the total costs converted as an annual percentage of the loan turnover, including foreign loan interest rates and other costs related to foreign loans that the Borrower receives. surety to be paid to the Lender, loan guarantors, loan insurers, agents and other interested parties.

Article 3. Principles of application of foreign loan conditions

1. Borrowers and foreign loans must meet the general conditions and corresponding additional conditions for each specific foreign loan.

2. Borrowers are responsible for complying with this Circular and other relevant laws when signing and performing foreign loans.

3. The State Bank supervises the borrower's compliance with foreign loan conditions through confirmation of foreign loan registration. For loans that are not subject to registration with the State Bank, the borrower is solely responsible before law for compliance with the conditions specified in this Circular.

Article 4. Inspection and examination of compliance with regulations on foreign borrowing conditions

The State Bank shall inspect and examine the borrower's compliance with the foreign loan conditions specified in this Circular in accordance with law.

Chapter II

GENERAL CONDITIONS

Article 5. Purpose of foreign loans

The borrower is allowed to borrow from abroad to serve the following purposes:

1. Implementation of production and business plans and investment projects using foreign loans of the following entities:

a) Of the Borrower;

b) Of enterprises in which the borrower contributes capital for direct investment (only applicable to medium and long-term foreign loans). In this case, the Borrower's loan limit on the total loan turnover for that production and business plan or investment project must not exceed the Borrower's capital contribution ratio in the enterprise that the Borrower has invested in. borrow to contribute capital.

Production and business plans, investment projects using foreign loans specified in this Clause must be approved by competent authorities in accordance with relevant provisions of Vietnamese law and in accordance with the scope of the license. establishment, business registration certificate, business registration certificate, investment certificate, registration of cooperatives and unions of cooperatives of the borrower or enterprise to which the borrower participates capital contribution for direct investment.

2. Restructure the Borrower's foreign debts without increasing borrowing costs.

Article 6. Foreign loan agreement

1. The foreign loan agreement must be signed in writing before the loan is disbursed and must not be contrary to the provisions of Vietnamese law, except for the case specified in Clause 2 of this Article.

2. In case a credit institution or foreign bank branch takes a short-term foreign loan, the foreign loan agreement must be signed in writing before or at the time of loan disbursement and must not be contrary to regulations. of Vietnamese law.

Article 7. Foreign loan currency

1. Foreign borrowing currency is foreign currency.

2. Foreign loans in Vietnam dong can only be done in the following cases:

a) The borrower is a microfinance institution;

b) Borrower being a foreign direct investment enterprise borrows from the profit distributed in Vietnam dong from direct investment activities of the Lender being a foreign investor contributing capital to the Borrower. ;

c) Other cases when considered and approved by the Governor of the State Bank based on the actual situation and necessary nature of each case.

Article 8. Security transactions for foreign loans

1. Security transactions for foreign loans are not contrary to relevant current regulations of Vietnamese law.

2. The use of shares, shares, capital contributions of Vietnamese enterprises or convertible bonds issued by Vietnamese enterprises as collateral for non-residents who are foreign lenders or related parties. The agency must ensure compliance with securities regulations, foreign investors' holding percentages in Vietnamese enterprises and/or other relevant laws.

Article 9. Foreign borrowing costs

1. Foreign borrowing costs shall be agreed upon by the borrower, lender and related parties, except for the case specified in Clause 2 of this Article.

2. In order to administer the limits of self-borrowing and self-paying foreign loans, when necessary, the Governor of the State Bank shall decide on the application of conditions on foreign borrowing costs; decide and announce the ceiling of foreign borrowing costs in each period.

Chapter III

ADDITIONAL CONDITIONS

Article 10. For the borrower being a credit institution or foreign bank branch

1. Conditions for short-term foreign loans:

a) Credit institutions, foreign bank branches must comply with the regulations of the State Bank on prudential ratios in banking operations, except for cases of non-compliance with the provisions of law. on safety ratios approved by the Prime Minister or the Governor of the State Bank in accordance with law;

b) Credit institutions, foreign bank branches may only borrow short-term foreign loans to supplement short-term credit capital.

2. Conditions for medium and long-term foreign loans:

Credit institutions, foreign bank branches may only borrow medium and long-term foreign loans when they comply with the State Bank's regulations on prudential ratios in banking operations, except for the following two cases: :

a) Failure to comply with the provisions of law on safety ratios approved by the Prime Minister or the Governor of the State Bank in accordance with the law;

b) Foreign medium- and long-term loans are eligible to be included in the second-tier capital of credit institutions, foreign bank branches and the implementation of this loan helps credit institutions, foreign bank branches meet the regulations on safety ratios.

Article 11. For the Borrower who is not a credit institution or foreign bank branch

1. Conditions for short-term foreign loans:

a) Borrowers are not allowed to borrow short-term for the purposes of using medium- and long-term capital;

b) For borrowers being state-owned enterprises, short-term foreign loans of state-owned enterprises must be approved by a competent authority, appraised and approved in accordance with the law on assignment of loans. , decentralizing the exercise of rights, responsibilities and obligations of the state owner towards state enterprises and state capital invested in enterprises.

2. Conditions for medium and long-term foreign loans:

a) For borrowers being state-owned enterprises, medium- and long-term foreign loans of state-owned enterprises must be approved by the competent authority, appraised and approved in accordance with the law on policies and procedures. assigning and decentralizing the exercise of rights, responsibilities and obligations of the state owner towards state enterprises and state capital invested in enterprises.

b) For the borrower who is not a state-owned enterprise:

(i) In case the Borrower has an investment project using foreign loans and has been granted an investment certificate, the balance of medium and long-term loans (including domestic loans) of the Borrower shall serve the following conditions: services for that project must not exceed the difference between the total investment capital and the contributed capital recorded in the investment certificate;

(ii) If the Borrower borrows a foreign loan to implement production and business plans, investment projects are not granted investment certificates, the balance of medium and long-term loans (including outstanding loans in country) of the borrower does not exceed the total loan demand in the production, business plan, investment project approved by the competent authority in accordance with the law.

Chapter IV

TERMS ENFORCEMENT

Article 12. Terms enforcement

1. This Circular takes effect from May 15, 5.

2. The provisions in Chapter II of Circular 09/2004/TT-NHNN dated December 21, 12 of the State Bank on guiding the borrowing and repayment of foreign debts of enterprises are annulled.

Article 13. Transitional provisions

Borrower's foreign loan agreements that took effect before the effective date of this Circular shall continue to be implemented in accordance with the signed loan agreement. The amendment and supplementation of the above-mentioned foreign loan agreements from the effective date of this Circular shall be made only when the amended and supplemented contents are consistent with the provisions of this Circular.

Article 14. Implementation organization

Chief of Office, Director of Foreign Exchange Management Department, Heads of units under the State Bank, Directors of State Bank branches in provinces and centrally run cities, Chairman of the Board of Directors, Chairman of the Association co-members, the General Director (Director) of the credit institution, foreign bank's branch shall be responsible for organizing the implementation of this Circular.